2 posts from September 2010

There is a lot that happens each year at OpenWorld (#oow10). This year was quite notable from a HCM perspective because Oracle has finally committed to more specific delivery of Fusion applications. Oracle is working with early customers today and plans to have a controlled release (Oracle called it a GA release, but they are being selective about to whom they will sell it initially) in Q1 2011. One of the early adopter customers, a large insurance company, is in the middle of implementing Fusion Talent Management (performance and compensation management). I also talked an E-Business Suite (EBS) customer that has asked to be an early adopter (EA) customer for 2011 for performance and compensation management). So, let’s start with Fusion and then discuss PeopleSoft (PS) and EBS.

Fusion HCM Applications

Much of what I said last year at OpenWorld still holds true in terms of scope of Fusion HCM. The one notable addition is Workforce Predictions. As the name suggests, it is analytics that uses HCM data to predict things like retention and performance. It leverages Oracle’s technology, Crystal Ball, to do the modeling and forecasting.

Contrary to some reports on Twitter, Fusion HCM applications are multi-tenant. There are some aspects of Oracle Fusion Middleware (OFM) that are not yet multi-tenant, but those elements are primarily related to business intelligence and data warehousing and really do not impact the actual HCM transactional applications themselves.

Oracle plans to offer customers choice in licensing and delivery model for Fusion applications. A customer could choose to buy a perpetual license and implement on-premise at one end of the spectrum or a SaaS deployment at the other end of the spectrum. Oracle has been touting “like for like” pricing. There will also be support for multiple countries (initially U.S., Canada, UK, China, Saudi Arabia, and UAE) which would have the corresponding up charges. There is no published subscription pricing to compare against so it is not clear how it will compare to alternatives. Some of the Fusion HCM modules are new. These include Workforce Predictions, Talent Review, Network At Work, and Workforce Lifecycle Management. These would not be “like for like” because they do not exist in PS, EBS, or J.D. Edwards.

By offering customers these licensing and delivery model choices, Oracle has created some complexity for itself in terms of delivering new functionality. Oracle will have multiple code lines that it will “true up” on a periodic basis. For the SaaS offering, Oracle plans to do quarterly updates that alternate between technology and functional updates (though initially some of the technology updates will likely include some functionality). For on-premise, the update will be less frequent and timed to correspond at a minimum (though it could be more frequent) with the rollout of other major components of the full ERP suite. So, a 2.0 version of Fusion apps would be the next on-premise release and would be expected in a 2 year timeframe and would “true up” the code line with the SaaS offering. From a practical perspective, this truing up can be difficult to manage, but Oracle believes it has the code management tools in place to do it.

In my discussion with customers, it appears most are interested in a co-existence strategy. They want to use Fusion Talent Management on top of their existing PS or EBS core HRMS applications. A main reason why is that they feel like they will need to do less (or no) customization to support their unique business processes. The embedded business process management (BPM) in OFM provides a very flexible and graphical way to define business processes. There is at least one customer that is implementing Fusion core HRMS functionality, but it is not far enough along where they are ready to discuss its experience.

Though customer experience is very limited, many of Oracle’s consulting partners have been working with Oracle on various aspects of development and testing (as well as working on some of the EA implementations) of Fusion applications for several years. Accenture, Cognizant, Deloitte, Infosys, PwC, and Wipro were on a panel where they described their involvement with Fusion applications. Also, other consultancies like KBace are also working with EA (or potential EA) customers.

PeopleSoft HCM 9.1

Even with all of the excitement around Fusion, most of the PeopleSoft customers are focused on their upgrade decisions, especially those customers on 8.9 or earlier. There are good examples of large, complex organizations that have made the move to 9.1. I attended presentations by Boeing and of a Large Financial Services Company (which could have been American Express who was scheduled to be there) presented by IBM. Boeing and the Large Financial Services company used the upgrade as an opportunity to reengineer global processes and to retire customizations so they decided to do a reimplementation as opposed to an in place upgrade. This seems to be an interesting trend that I expect other relatively highly customized customers to adopt.

Probably the biggest news is that Oracle will now be doing annual updates called Feature Packs (FP) to correspond with PeopleTool updates. They plan to have a 9.2 release in 2012 (scope has not been finalized) which will be a cumulative release (as well as new functionality not included in the FPs). We have seen a lot of customer interest in the upgrade with some customers even looking to add on new modules. More frequent delivery of capability will likely encourage others including 9.0 customers to move to 9.1. Though some are predicting the imminent demise of investment in new functionality for PeopleSoft with Fusion imminent, I believe it is premature.

Oracle E-Business Suite HCM 12.1

Much like PeopleSoft 9.1, 12.1.x seems to be the “go to” release for EBS HCM customers. I talked to a large, global conglomerate and a global financial services company about their upgrade experiences and they were relatively smooth. The one gotcha both organizations reported was related to Internet Explorer (different issues depending on which IE release you were on).

One of the most interesting additions to EBS 12.1 was full multi-tenancy. This has spurred some of the consultancies such as KBace and Caliber Point (Hexaware) to deliver SaaS offerings. They are in the early stages, but I can see them as useful not only for new implementations, but for upgrades (upgrade HCM separately from Financials in a previously single instance environment).

Overall Observations

There were some things that I thought I would see, but did not. With Oracle’s increasing emphasis on hardware, I thought we would hear more discussion of an appliance strategy, especially for Fusion applications (even with some remote management capability). I also thought I would see demonstrations that went beyond the things that they have been showing for the past year. Workforce Predictions is relatively new and the demo of Payroll Dashboard gave a glimpse into some of the rethinking that Oracle has done around the core HRMS apps (trying to streamline the tasks of professional users), but I was hoping to see more in the core HRMS applications.

As I reflect on my time at the conference, it definitely was a coming out party. The Fusion apps team has worked for a very long time without being able to really talk in detail publicly about what they were doing and why. OOW was the beginning of that conversation with customers and prospects. The timing is important because the competitive threats have never been greater. If the quality of Fusion HCM applications is high, I think Oracle will have a reason to be confident.

This is going to be a quick one as I am at Oracle OpenWorld and will need to get busy on that Trip Report soon. Certainly, the Learn.com acquisition was a big deal. I am working on a note discussing that acquisition as well as another note on the broader subject of M&A in the HCM world. I am also trying to finish up the Magic Quadrant for Employee Performance Management Software (all of the acquisitions are not helping – the latest in case you had not seen it is SumTotal announced today it had acquired Softscape).

Back to Taleo World. The thing that struck me about the event, in stark contrast to most vendor user conferences I attend, was the interview of two CEOs as keynotes. The first keynote was an interview with A.G. Lafley, former CEO of Proctor and Gamble. He put the importance of human capital management and talent management in the context of the business challenges his organization faced as it tried to turn around its performance after a lackluster period. There were many lessons to be learned from keeping things simple to create leverage of talent outside the enterprise to drive innovation (his book “The Game-Changer” is a good read to get the details). I hope that the Taleo folks recorded the session as there were many gems that could provide compelling use cases for workforce planning and analysis.

The second CEO interview was with Ken Thiry, CEO of Davita. It was quite inspirational. Davita is in a business that literally has life and death implications (dialysis treatments). Many of its workers are not highly paid. Yet, it has created a unique culture that not only has driven strong business performance, but has substantially improved employee engagement and reduced turnover. It was a strong lesson that there is much more to talent management than technology. Technology can help enable better talent management, but if the fundamentals are not in place, the best technology does not matter.